What You Need to Know for Feb. 6th

In partnership with

Welcome back!

We are slammed with Earnings, so let’s get right into it.

Earnings Corner 📜 

Trending Up 📈 

Palantir (PLTR) reported earnings that beat estimates, with revenue of $828MM (vs. $776MM expected) and EPS of $0.14 (vs. $0.11 expected). The software company saw 64% y/y growth in U.S. commercial revenue and 45% growth in government revenue, with co-founder and CEO Alex Karp calling the momentum in the two units, “unlike anything that has come before.” The last year has seen the company’s AI platform gain popularity, fueled in recent days by DeepSeek-related concerns. The stock was up 21% at Wednesday’s close

Spotify (SPOT) reported earnings that missed estimates, with revenue of 4.24B euros up 15.5% y/y (vs. 4.19B euros expected) and EPS of 1.76 euros (vs. 1.99 euros expected). Spotify added 35MM MAUs (monthly active users), for a total of 675MM (vs. 664.3MM expected). As in previous years, Spotify Wrapped was a key engagement driver for the month of December. The stock was up 8.1% at Wednesday’s close

Trending Down 📉 

Alphabet (GOOG) reported earnings that beat estimates, with revenue of $96.47B up 15.1% y/y (vs. $96.67B expected) and EPS of $2.15 (vs. $2.13 expected). Mgmt. announced plans to spend $75B on AI and data center infrastructure, much more than the $58.84B projected by analysts. The stock was down 6.9% at Wednesday’s close

Qualcomm (QCOM) reported earnings that beat estimates, with revenue of $11.67B up 18% y/y (vs. $10.93B expected) and EPS of $3.41 (vs. $2.96 expected). All 3 of the chipmaker’s segments saw growth this quarter, including the QCT division (20% y/y), mobile handset segment (13%), and automotive business (61%). Mgmt. noted that the release of the DeepSeek AI model is a pro for Qualcomm, as their chips can run the streamlined model locally. Mgmt. also released Q2 projections slightly above analysts’ expectations. The stock was down 4.6% after Wednesday’s close

Arm Holdings (ARM) reported earnings that beat estimates, with revenue of $983MM up 19% y/y (vs. $949MM expected) and EPS of $0.39 (vs. $0.34 expected). Mgmt. narrowed its FY revenue guidance from $3.8B-$4.1B to $3.94B-$4.04B, as AI hype has been slow to translate into sales growth. The stock was down 6.4% after Wednesday’s close

Alternative asset managers KKR (KKR) and Apollo (APO) reported earnings that beat estimates, even as revenues severely contracted. KKR saw earnings jump 33%, while APO saw a 16% increase, with the firms’ management fees jumping 26% and 20%. However, revenues were down 26% and 52% - in Apollo’s case, due to reduced retirement services premiums. KKR stock was down 5.7% at Wednesday’s close, while Apollo was down 1.6%

Uber (UBER) reported earnings that missed estimates, with revenue of $11.96B up 20% y/y (vs. $11.77B expected), but EPS of only $0.23 (vs. $0.50 expected). The company reported $44.2B in gross bookings (vs. $43.49B expected), along with adjusted EBITDA up 44% y/y to $1.84B. Mgmt. announced that they will soon be launching robotaxi services in Austin, TX, partnering with Waymo. The stock was down 7.6% at Wednesday’s close

MicroStrategy (MSTR) reported a wider-than-expected loss, with EPS of -$3.03. However, these results did not reflect the FASB’s new crypto accounting standards, which will be applied in next quarter’s earnings. The end of 2024 saw MSTR purchase 218,887 bitcoins for $20.5B; currently the firm holds 471,107 bitcoins, worth $45.65B. MSTR also announced a rebrand, shortening its name to Strategy. The stock was down 3.3% at Wednesday’s close

Disney (DIS) reported earnings that beat estimates. The company’s streaming business reported a second quarter of profitability, but Disney+ saw subscriptions fall 1% to 124.6MM. The decline comes after a 2024 price hike, which saw revenue per subscriber increase by 4%. The stock was down by 2.4% at Wednesday’s close

Chipotle (CMG) reported earnings in line with estimates. Revenue was up 13.1%, with comparable sales up 5.4% to $2.85B and transactions up 4%. However, mgmt. warned of softness in the month of January and projected comparable sales growth in the low- to mid-single digits (vs. 5.4% expected). The stock was down 2.6% at Wednesday’s close

PayPal (PYPL) reported earnings that beat estimates, but subsidiary Braintree’s high margin, low growth strategy caused analysts concern. The stock was down 12.9% at Wednesday’s close

PepsiCo (PEP) reported earnings that beat estimates, while missing on revenue as North American demand for snacks and drinks fell for the fifth quarter in a row. The stock was down 2.9% at Wednesday’s close

TransDigm (TDG) reported earnings that beat estimates, with a record 53% profit margin. The stock was down 4.6% at Wednesday’s close

Free Notion and Unlimited AI

Thousands of startups use Notion as a connected workspace to create and share docs, take notes, manage projects, and organize knowledge—all in one place. We’re offering 3 months of new Plus plans + unlimited AI (worth up to $3,000)! To redeem the Notion for Startups offer:

1. Submit an application using our custom link and select Beehiiv on the partner list.

2. Include our partner key, STARTUP4110P67801.

Apply Here

Today’s Headlines 🍿 

• Tariffs on Canada and Mexico were paused earlier this week: President Trump shared that the two countries were taking steps to soothe his concerns about border security and drug trafficking. Canada is appointing a "fentanyl czar,” while Mexico would send an additional 10,000 national guardsmen to its border

• Trump says America will own and develop Gaza: Hosting Benjamin Netanyahu in Washington, Trump said that the “U.S. will take over the Gaza Strip” and that the 2mm Palestinians living there should leave. Trump’s comments sparked sharp bipartisan, global criticism

• Job openings of 7.6mm were the lowest since September and below estimates of 8.0mm. The news suggests that the labor market is slowing, but remains strong. Americans are enjoying greater job security, with the number of layoffs and quits falling

• China announced retaliatory tariffs on U.S. exports including a 15% tax on coal and LNG products, and a 10% one on crude oil, agricultural machinery, and large-engine cars. Google is also under investigation for violation for violation of antirust laws

  • Meanwhile, McKinsey partners are questioning whether it makes sense to have a China presence as tensions mount. Apparently, their unit is unprofitable

• The U.S. is looking to create a sovereign wealth fund. After tasking the Treasury and Commerce Departments with crafting a plan for a SWF along the lines of Norway and Saudi Arabia’s, Trump told reporters that “USA” could help finance a purchase of TikTok

• The SBA is under attack from DOGE: Elon Musk’s DOGE has been granted to Small Business Administration (SBA)’s systems and has set his sights on potentially ending the SBA. Eric Pacifici shared what it means for Wall Street here

  • Trump and DOGE are also looking at potentially ending the Department of Education, and DOGE has found $8mm in cost savings from cancelling government politico subscriptions

• The Federal buyout offer has been accepted by more than 20,000 federal workers. This is roughly 1% of the total 2.3mm federal workforce. That’s a substantial number, but well below the targeted cut of 5-10%

• Apollo is working on building the first marketplace for private credit. So far they’ve traded $2B of products they’ve originated to 60 counterparties. The asset manager is discussing with banks, exchanges, and fintech firms ways to provide real-time data and pricing

• Lender demand for X paper exceeded expectations: The return of big advertisers and the inclusion of xAI as a catalyst has helped banks offload hung X debt:

• Sponsors aren’t messing around anymore: Private equity firms are finding new ways to curb creditor power, adding provisions to credit docs to cap voting rights of individual creditors

• Estee Lauder plans to lay off 5,800-7,000 employees following projections revenue will decrease by 10%-12%, worse than the -6% loss expected. The Aveda, MAC, and La Mer owner lowered its outlook, citing economic slowdown in China and Korea, and mounting geopolitical conflict

• Match appoints Zillow co-founder as CEO: After the dating conglomerate missed Q1 sales estimates, shares slid with the arrival of Spencer Rascoff. Match’s previous chief executive struggled to stem the company’s bleeding as Tinder subscribers steadily dropped off and left after just three years on the job

• Apple rolled out a new feature for parties: On Tuesday, Tim Cook announced that iCloud+ subscribers will be able to use a new app, called Apple Invites, to create invites and send them to contacts. Expanding its offering, Cupertino is taking on the likes of Paperless Post and Partiful

• Citigroup is going to stick to a hybrid work schedule: A month after JPMorgan confirmed a 5-day in-office policy starting in March, Jane Fraser told executives that hybrid work will continue as it provides the bank with a “competitive advantage”

• Andreessen Horowitz has hired Daniel Penny: The former Marine was cleared of criminally negligent homicide after he used a chokehold on an agitated subway rider. As a “deal partner,” Penny is joining the American Dynamism team which targets companies that “support American interests” (think Anduril)

• Vanguard has slashed fees across its ETFs: After the biggest cut in its history, Vanguard’s average fee is now 0.07%. The move marks the first major initiative in new CEO Salim Ramji’s six-month tenure

• Eggs now cost $7/dozen: Up 50% in the past year, egg prices have surged on the back of a widespread bird flu epidemic and robust consumer demand. Grocery stores, which typically use eggs as loss leaders, and retailers are struggling. WaffleHouse, to name one, has added a $0.50 per egg surcharge to customers’ tabs

It’s time for our annual Wall Street Compensation Survey

Through Buyside Hub, Investment Professionals are submitting compensation data and accessing our platform full of thousands of wall street compensation datapoints. Buyside professionals receive 12 months of free access for contributing, while sell-side investors receive free access through March 31st upon contributing. Access our Data today.

M&A Transactions💭 

Ambry Genetics, operator of a genetics diagnostics company, was acquired for $600.0M by Tempus AI (NAS: TEM). EV/EBITDA was 15.0x and EV/Revenue was 2.0x. Morgan Stanley advised on the sale.

Velocity Risk Underwriters, provider of insurance service, was acquired for $525.0M by Ryan Specialty Holdings (NYS: RYAN). EV/Revenue was 6.48x. Howden Capital Markets & Advisory, Insurance Advisory Partners, and J.P. Morgan advised on the sale.

Vantive, provider of kidney care services and a subsidiary of Baxter International, was acquired for $3.8B by The Carlyle Group. J.P. Morgan and Perella Weinberg Partners advised on the sale.

Triumph Group (NYS: TGI), designs and manufactures a broad portfolio of aerostructures, has entered into a definitive agreement to be acquired for $3.0B by Berkshire Partners and Warburg Pincus. EV/EBITDA was 24.17x and EV/Revenue was 2.48x. Goldman Sachs advised on the sale.

The Qioptiq Group, designer and manufacturer of photonic products, was acquired for $710.0M by Teledyne Technologies (NYS: TDY). Evercore Group and Harris Williams advised on the sale.

Teads, operator of a cloud-based digital video marketplace, was acquired for $900.0M by Outbrain (NAS: OB). Morgan Stanley advised on the sale.

St. Modwen Homes, developer of real estate properties, was acquired for $265.42M by Miller Homes.

Soleo Health, provider of specialty pharmacy and disease management services, was acquired for $1.1B by WindRose Health Investors and Court Square. EV/EBITDA was 18.33x. Houlihan Lokey advised on the sale.

SecureWorks, a cybersecurity provider, was acquired for $859.0M by Sophos. EV/Revenue was 2.53x. Morgan Stanley, Piper Sandler, and Wells Fargo advised on the sale.

Miller Electric Company, provider of electrical contracting services, was acquired for $865.0M by Emcor Group (NYS: EME). EV/EBITDA was 10.81x and EV/Revenue was 1.07x. Stephens advised on the sale.

Gulf Coast Express Pipeline, operator of a natural gas pipeline project, was acquired by ArcLight Capital Partners for $865.0M. The transaction values the company at an estimated $3.46B.

The Outdoor Wireless Networks and Distributed Antenna Systems Business of CommScope Holding Company was acquired by Amphenol (NYS: APH) for $2.1B. Moelis & Company advised on the sale.

Canadian Western Bank (TSE: CWB), a diversified financial service organization, was acquired for $3.6B by National Bank of Canada (TSE: NA). EV/Net Income was 18.29x and EV/Revenue was 4.14x. J.P. Morgan advised on the sale.

The Food Testing Business of Bureau Veritas was acquired by Merieux Nutrisciences for $372.53M. BNP Paribas advised on the sale.

Asteron Life, provider of life insurance services, was acquired for $227.85M by Resolution Life Australasia.

TopBloc, provider of consulting services, has reached a definitive agreement to be acquired for $340.0M by Apex Systems.

Prism Vision Group, provider of advanced ophthalmology and vitreoretinal services, reached a definitive agreement to be acquired for $850.0M by McKesson (NYS: MCK). The transaction values the company at an estimated $1.06B.

Latin Resources, an Australian-based mineral exploration company, was acquired for $348.53M by Pilbara Minerals (ASX: PLS). Macquarie Capital advised on the sale.

Gatekeeper Systems, developer of shopping cart management software, was rolled into The Continuation Fund Graham Partners OptConnect Continuation Fund from Graham Partners IV through an estimated $450.0M deal.

Brightcove, a provider of cloud-based streaming technology, was officially acquired for $233.0M by Bending Spoons. EV/EBITDA was 20.33x and EV/Revenue was 1.17x. Lazard advised on the sale.

Shibaura Electronics Company (TKS: 6957), produces and sells glass-encapsulated NTC thermistors, reached a definitive agreement to be acquired for $427.02M by Yageo (TAI: 2327). EV/EBITDA was 9.2x and EV/Revenue was 1.95x.

Metamark, manufacturer of self-adhesive sign vinyl, was acquired for $181.09M by UPMRaflatac.

CB Group Management (TKS: 9852), a Japanese company engaged in trading daily necessities and miscellaneous goods, has reached a definitive agreement to be acquired by C Holdings for $112.28M. EV/EBITDA was 3.71x and EV/Revenue was 0.11x. Daiwa Securities Group advised on the sale.

Private Placement Transactions💭 

Solaris, developer of an API-based banking-as-a-platform, raised $144.87M of Series G venture funding led by Boerse Stuttgart and SBI Holdings.

HAKKI AFRICA, provider of micro-financing services, raised $1.26B of Series C venture funding through a combination of debt and equity. The Series C funding was led by SMBC Venture Capital and Global Brain.

Auro, developer of a ride-hailing platform, raised $227.66M of venture funding through a combination of debt and equity from Uber at a pre-money valuation of $531.2M.

AdvanCell, operator of a radiopharmaceutical company, raised $112.0M of Series C venture funding led by Sanofi Ventures, SymBiosis Capital Management, and Abingworth.

Leading Mark, operator of an online hiring platform, raised $1.03B of venture funding through a combination of debt and equity. The deal was led by Femto Partners.

Odds of the Day 🍒 

Kalshi traders are pricing in a 49% chance of Trump ending the Department of Education this year.

New Traders on Kalshi receive a $20 bonus of trading credit when depositing $100+ with the code “HYH”.

Noteworthy Chart 🧭

The Starbucks fall from grace:

Meme Cleanser 😆 

Finance Merch Referrals ☕️ 

Until next time!

Housekeeping Items:

Our Weekly Poll:

Recruit for Private Equity: Check out Peak Frameworks through us, the Private Equity Course that has placed thousands of students into elite private equity shops.

Finance Jobs: Looking for a job in Finance? Join Buyside Hub to access the Job Board for free.

Join beehiiv: Looking to start your own newsletter? Join beehiiv through us and you’ll get 30 days free and 3 months of a 20% discount.

Obviously, none of this constitutes financial or investment advice.